Unlocking businesses’ potential to create a healthier workforce

The challenge

At a time when labour shortages mean that 38% of businesses have turned down opportunities to grow and over 600,000 people who want a job are long-term sick, there's a compelling case for business and government to work together to improve the health of the UK workforce.

By reducing the barriers that hold firms back, government can convert increased interest in health and wellbeing into practical action that reduces sickness absence and drives sustainable growth.

The opportunity

Employers can drive have a demonstrable impact on health and economic outcomes. They could help reduce 10-20% of the disease burden in the 20-64 age group. And our research has shown that business-led interventions could lead to a reduction in sickness absences by 30% per year, amounting to around one fewer day per worker per year.

Recent CBI research found that 50% of SMEs and 64% of non-SMEs stated health and wellbeing as one of their top diversity and inclusion priorities now and in two years' time. The case for change and the opportunity to harness is clear.

The consultations

We focused on the importance of Occupational Health (OH) measures as part of our asks around the Spring Budget in March 2023. The Chancellor answered these by announcing two consultations.

The Occupational Health: Working better consultation focused on the role of the government, OH providers and employers in increasing OH coverage across the UK. With the aim of harnessing better workplace support that leads to improved productivity and prevention of ill-health related job losses.

The Tax incentives for occupational health: Consultation examined the case for change with tax incentives and specifically the Benefit-in Kind exemptions for medical benefits, to encourage greater employer provision of occupational health services and health support for those in work.

CBI response

Following extensive member and stakeholder discussions, we recommended the following within our responses to these consultations:

OH Working Better Consultation

• Introduce a national voluntary Health at Work standard to support businesses to take workforce health approaches that deliver better health outcomes in work and demonstrate best practice across all areas of the business community.
• Provide greater tax incentives and targeted SME subsidies to boost uptake of OH across the business community, including delivery of the SME subsidy for OH and making health investments such as EAPs and other interventions a non-taxable benefit.
• Establish a Centre for Work and Health to prioritise research into emerging trends, e.g., how to address the current 16-24 year-old mental health and employment challenges, as well as evaluate the impact of interventions on health outcomes at a business and economy level to better support informed decision-making.
• Establish a multi-disciplinary OH workforce to increase and sustain high levels of quality service delivery across both clinical and non-clinical roles to mirror how businesses view proactive and reactionary health support.

Tax Incentives for Occupational Health Consultation

• An ambitious expansion of tax-free occupational health benefits - two-thirds of businesses signalled they would increase investment if the tax costs were removed.
• Fully tax-free Employee Assistance Programmes (EAPs) including for household family members and any digital self-help tools.
• Remove ‘one per employee per tax year’ tax-free limit for health screening and medical check-ups.
• ‘Recommended medical treatment’ tax relief should be made more preventative by removing the ‘28-day unfit for work’ condition and scrapping the £500 tax-free cap.
• Tax-free treatment for eye tests (for health and safety purposes) and glasses/contact lenses (for VDUs) reimbursements in line with the original intention of the relief.
• New statutory exemption for adult vaccinations (including virus/ disease testing) and reimbursements to cover new multi-purpose vaccines combining flu, COVID and respiratory syncytial virus (RSV) protection that will become available over the next few years.
• Tax-free employer-provided private GP consultations and diagnostic testing to ease difficulties currently faced by employees in arranging NHS GP appointments.
• Temporary tax-free private medical insurance (PMI) and employer contributions to healthcare benefit trusts to ease NHS waiting lists in the short term, depending on fiscal headroom.
• Relaxation of Cycle-to-Work scheme qualifying journey condition to encourage further take up and to create a healthier workforce.

What next

The CBI will continue to push for greater support for occupational health. Some of these recommendations have already featured in our Autumn Statement asks, and your input and experiences around this issue will feed into our discussions with both parties ahead of General Election to ensure it remains front of mind in policy considerations.

Tell me more

Would you like to hear more about this or tell us how your business could be supported to thrive in relation to employee health? Please contact Lydia Hamilton-Rimmer (Workforce Health policy lead) and Andrew Scott (Principal Tax Adviser).